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Homeownership for Individuals with Disabilities Program

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The Homeownership for Individuals with Disabilities Program is offered through the Maryland Department of Housing and Commu​nity Development and is available statewide. Please call the department's Single Family Housing unit at 301-429-7852 or e-mail to SingleFamilyHousing.dhcd@maryland.gov for additional information.

Eligible Borrowers:

One of the borrowers is disabled

One of the borrowers is a guardian for an immediate family member who is disabled (regardless of age) who resides with one of the borrowers and is cared for principally by one of the borrowers

A "Certificate of Disability" completed by a health, mental health, or disability professional is required. All borrowers must meet program eligibility guidelines and the loan must conform to all underwriting criteria. Cosigners are not permitted. Borrowers must be first-time homebuyers unless buying in a Targeted Area or are a veteran and exercising one-time exemption to first-time homebuyer requirement (must provide copy of DD-214).

Property prohibited from ownership at the time of loan closing includes:

Any mobile home;

Raw land;

A building lot;

Any principal residence - owned by borrower(s) or spouse/non-borrower;

A vacation home;

A rental property;

An inherited property;

A commercial property;

Any jointly held property;

A cooperative; and

Any other real property

Eligible Properties:

Maximum Lot Size:

Any land appurtenant to the residence which is not necessary to maintain the basic livability of the residence may not be financed with the proceeds of the Mortgage Loan. The lot size cannot exceed four acres, however, exceptions may be requested for properties with septic and/or zoning considerations that require additional acreage. The maximum exception will not exceed ten acres. The borrower is to request an exception listing the reason(s) why the exception should be made. The borrower’s name and address along with any pertinent documentation is to be included with their written request. These requests are to be submitted to the Homeownership for Individuals with Disabilities Program underwriter as soon as the borrower is aware of the situation.

Proximity Rule:

Occupancy implies that the home is located within reasonable proximity of the borrower’s place of employment. If the borrower’s employment requires the borrower’s absence from home a substantial amount of time, the following two conditions must be met:

The borrower must have a history of continuous residence in the community; and

There must be no indication that the borrower has established, or may be required to establish, principal residence elsewhere.

Assets:

An Asset Test Worksheet will be completed for borrowers whose liquid assets equal or exceed 20% of the purchase price of the property.

A gift in the form of cash or equity is a liquid asset.

Computations of the Asset Test Worksheet will indicate the eligibility of the loan

Homebuyer Counseling:

A homeownership counseling certificate must be received by all buyers prior to execution of a contract of sale for a property that will be purchased under this program (contracts of sale that are executed prior to completion of homeownership counseling will not be eligible).

Counseling certificate may not be more than one year old at the time of closing.

A home inspection is required, which will address fire, safety and health issues.

Interest Rate:

A range of 2% below market rate to .25% below the Maryland Mortgage Premier Rate http://www.mmp.maryland.gov/Lenders/Pages/Interest-Rates.aspx​ (subject to change) based on borrower qualifying at a housing expense ratio not greater than 30.0% [principal and interest payment of mortgage loan + 1/12th of the annual amount for the following: property taxes, hazard insurance and ground rent or HOA fee, if applicable divided by the gross monthly income of the borrowers] and a total debt-to-income ratio not greater than 38.0% [housing expenses plus long term debt divided by the gross monthly income of the borrowers].

Borrower may be required to respond to income monitoring during the term of the loan; rate may be increased after closing if Borrower's household income exceeds the Maximum Current Annual Household Income.

If prequalification is required, borrower will be qualified at the upper range of the interest rate.

Maximum Current Annual Household Incomes:

The total combined income of all members of the household may not exceed:

Maximum Underwriting Ratios:

Exceptions to these ratios will be considered up to 32.0%/40.0% with at least two strong compensating factors.

Non-Taxable Income:

If a particular source of regular income is not subject to federal income taxes (for example, certain types of disability and public assistance payments, military allowances), the amount of continuing tax savings attributable to the non-taxable income will be added to the borrower’s gross income when calculating the borrower’s underwriting ratios.

The percentage of income that is added is the appropriate tax rate for that income amount.

If the borrower is not required to file a federal income tax return, the tax rate that will be used is 25 percent.

Credit:

In order to be eligible for a Homeownership for Individuals with Disabilities Program loan, the representative credit score (middle score of three scores or the lower score of two scores) must be 640 or above.

Satisfactory credit history required

Borrowers having no traditional or non-traditional credit history are not eligible

In the absence of a credit score on the credit report, evidence of acceptable non-traditional qualifying credit, such as a satisfactory rental history, satisfactorily paid utility (cable, telephone, electric and gas) bills, satisfactorily paid insurance (renter’s or car) bills, etc. may be considered

Applicants must have established an acceptable credit rating for at least one year from the date of the release of a judgment or collection account

An exception to this policy will be considered if the paid collection account or judgment was a medical account with a nominal balance and applicant has a reasonable explanation why the account was delinquent